Raise money clever kids

Step 1: Lead by example

Like it or not, you are your child’s financial role model. They will learn their attitude to money by watching you.

Every trip to the supermarket or shopping centre is a chance to teach your child about how to identify value, living within a budget, the difference between needs versus wants, and how to be a more conscious consumer.

Step 2: Learning delayed gratification

Delayed gratification is not a concept that comes naturally to most children. Teach them about self control now and their credit card will thank you in years to come. One way to do this is by getting them to save for the “please, please, please gotta have it” item.

Open a savings account where they can use their birthday, Christmas or pocket money to work towards their goal. If by the time they’ve saved enough they no longer want the item, that’s a bonus – you will have also taught them about impulse purchases.

Step 3: Finding a balance between saving and spending

To introduce your kids to the concepts of budgeting and money management, talk to them about splitting their pocket money – keeping some for saving, some for spending and if you want to encourage them to be community minded, some for charity (it also prepares them for the harsh reality of tax – you don’t get to keep everything you earn!)

A good split could be save 40%, spend 50% and donate 10%.

Step 4: The power of pocket money

There is a lot of debate over what you should pay pocket money for, and how much. We’ll leave you to figure that one out for yourself. What pocket money does do is teach kids how to responsibly spend, save and goal set.

They learn the value of money and how hard you have to work to make it. And if you’re not careful, how quickly it can disappear!

Step 5: Let them make their own decisions

Allow them to make some of their own spending decisions. Whether these are good or bad choices, they will learn from them. Encourage your kids to shop around for the best deals, look for good quality products and wait for more expensive items to go on sale.

Step 6: Getting a job

If your kids are older, think about encouraging them to get a part time job that doesn’t interfere with study. Like pocket money, earning their own income teaches them the value of money.

It also helps them become more independent and confident, and introduces them to the concepts of tax, superannuation and pay slips.

As they get older, they will start shopping online. It’s too easy to go click crazy when shopping from a keyboard.

A savings account with an attached debit card, like P&N’s Student Account, lets them take responsibility for their purchase decisions without the risk of spending more money than they have.